Floyd Mayweather is one of boxing's biggest names and is the only athlete besides Tiger Woods to earn more than $100 million in a single year.
While he has made a lot of smart moves with his money, he has had his fair share of mistakes too -- and there are three mistakes in particular you certainly don't want make yourself.
Continue Reading Below
Source: Flickr /bySo Max O.
The backgroundThis year, Mayweather topped the Forbes annual list of the world's highest paid athletes, making $105 million in just 72 minutes worth of boxing matches.
But even with all of that money -- an estimated net worth of $280 million at last count -- here's what Mr. Mayweather could have done better:
1. Liquid goldIn a 2013 story for ESPN the Magazine, writer Tim Keown describes a trip to a Foot Locker for Mayweather to buy "shoes, shirts, shorts, socks" and all.
While in Foot Locker, Keown describes the following scene:
Yes -- you read that right -- at the time, Mayweather had an astonishing $123 million in a single bank account because he is "a big proponent of maximum liquidity," meaning he loves cash.
Source: Flickr / reynermedia.
And while cash isn't a bad thing, for everyday Americans, hoarding cash into bank accounts for the purposes of saving for the future can have disastrous consequences. Should you have an emergency fund? Absolutely.
But should you only save for retirement via hoarding cash and avoid the stock market altogether? Absolutely not.
A recent study revealed 25% of Americans think saving is best done in cash. But if you're saving for the long-term, the historical 9.5% return offered by the stock market far outpaces the minimal 0.12% average rate paid on savings accounts.
In that example, by saving $1,000 a year for 20 years, a person investing in the stock market would have $40,000 more than someone who didn't.
Cash may be king if you have a bank statement that's 11 numbers long, but that isn't so for the rest of us.
2. Enough is enough Floyd Mayweather is notorious for posting pictures of himself and his wealth on Instagram, with one of the most ridiculous being his watch collection:
A 2010 study by Princeton professors found while money may "buy happiness," it's only effective to a certain point.
As The Wall Street Journal reported:
In other words, like Mayweather, many think only money and possessions are the key to happiness, but the reality is, they aren't.
3. Turning down Pacquiao In 2011, it was widely reportedMayweather turned down a $65 million paycheck he would have received if he fought Manny Pacquiao.
And in recent days, newswires have been abuzz because the tables have finally turned and Mayweather declared:
So what does this have to do with us?
Well it turns out, Warren Buffett has a bit of wisdom we would do well to listen to.
And in fact, when you consider that Mayweather actuallyhung outwith Buffett earlier this year -- as shown to the right -- he should listen as well.
When discussing the stock market in his 2012 letter to shareholders Buffett said:
Put simply, patience is key in investing and in life, but when a guaranteed outcome is already on the table -- like a $65 million payday for Mayweather -- you're best suited to take the money while it's there.
Does this mean you should cash in your stocks the moment you're in the green? Absolutely not. But it does mean that you should remember the example of how investing in great businesses over the long-term is the key to financial security.
In short, for everyday individuals like you and I, the stock market is where financial futures are secured, so don't hesitate to get into the ring.
The article Floyd Mayweathers 3 Biggest Money Mistakes originally appeared on Fool.com.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.